Annuity product innovations include a wide variety of ways to provide guaranteed income through annuitization choices, income riders called guaranteed lifetime withdrawal benefits (GLWB) or guaranteed lifetime income benefits (GLIB) and withdrawal benefits. These options provide retirees the amount of guaranteed income and flexibility and control over retirement savings.

Annuitization

Annuitization Traditional income options from annuities include guaranteed income for life, for a specified period, or a combination of a lifetime payout with a guaranteed period. These options are typically referred to by the industry as “annuitization.” Annuitization is available in both immediate (also called payout or income annuities) and deferred annuities. The selected income stream is guaranteed. Also, many products offer inflation adjustment features and more innovation is currently underway that will provide guaranteed inflation protection using the consumer price index and other inflation measurement indices. Here is a typical list of annuitization options available on fixed deferred and lifetime income (immediate) annuities: FIND OUT MORE - DOWNLOAD THE NAFA's FACTS ABOUT ANNUITIES PDF

Income Riders

An income rider on a fixed or fixed indexed annuity allows a retiree to build a secure retirement income. The payout provided by the income rider is guaranteed by the issuing insurance carrier for the life of the annuity owner. The issuing insurance carrier bears all of the investment and longevity risk on the guaranteed payout, which means that the consumer is completely protected from these risks. Some annuity carriers even provide for the income to substantially increase in the event that the annuity owner becomes confined to a nursing home, further sheltering the annuity owner from risk. In addition, the annuity owner retains access to the annuity’s remaining value and also continues to reap the benefits of interest credits to the annuity’s value...FIND OUT MORE - DOWNLOAD THE NAFA's FACTS ABOUT ANNUITIES PDF

Withdrawal Benefits

Most fixed annuities contain a provision to withdraw a portion of the annuity value without any surrender charge, usually after the first policy year. Many fixed annuities which are qualified contracts (IRAs) allow the stated withdrawal amount or the required minimum distribution (RMD), whichever is greater. However, this benefit is not guaranteed and if you withdraw more than the amount specified by the benefit you may incur a withdrawal charge...FIND OUT MORE - DOWNLOAD THE NAFA's FACTS ABOUT ANNUITIES PDF